Farallon Resources Ltd. (fka FRLIF)

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Zinc down 1.8%, Copper Declines in London as China Vows to Enforce Curbs on Real Estate
By Bloomberg News - Jul 13, 2010

Copper dropped for a second day on concern that China’s determination to rein in real-estate speculation will reduce demand for the metal used in pipes and wires. Aluminum, zinc, lead and nickel also fell.

Copper for three-month delivery decreased as much as 0.9 percent to $6,568 a metric ton on the London Metal Exchange and traded at $6,580 at 3:10 p.m. in Shanghai. Aluminum fell 0.6 percent to $1,960 a ton after better-than-expected quarterly results from Alcoa Inc.

China’s benchmark stock index tumbled the most in two weeks after the government quashed speculation it will abandon real- estate curbs that drove property prices to snap 15 months of gains. The country will “strictly” enforce housing policies, such as lending rules, to prevent speculative investment, the Ministry of Housing and Urban-Rural Development said today.

“We see a new round of declines looming on macro uncertainties,” Shi Wenzhu, an analyst at Great Wall Futures Co., said from Shanghai. “Demand prospects in China are turning bearish too now that we’re in the low-production season.”

A boom in housing construction has led to a surge in China’s appetite for raw materials. Copper has advanced 35 percent in the past 12 months on the global economic recovery, led by China, the largest metals user. Aluminum has gained 26 percent in the past year.

“We have bad news from the macro side now and then but I don’t think a double dip is likely nor is a slump in metal prices,” said Edward Fang, an analyst at China International Futures (Shanghai) Co.

Global Consumption

Alcoa, the largest U.S. aluminum producer, reported second- quarter profit that topped analysts’ projections yesterday as higher metal prices boosted sales. Stronger demand will increase global consumption 12 percent this year compared with the 10 percent gain previously forecast, the company said.

Smelters in China, the world’s largest aluminum producer, may idle as much as 1.5 million tons of production capacity in the third quarter as prices of the metal have fallen below some of the producers’ costs, Alcoa said yesterday.

Zijin Mining Group Co. said that a copper smelter at its Zijinshan mine has been closed after a leak. Heavy rain caused acidic wastewater to flow into a river, killing fish, the company said in a statement.

“A small copper smelter as Zijin doesn’t pose any impact on domestic supplies,” Great Wall’s Shi said.

Copper for October delivery fell as much as 1.5 percent to 52,250 yuan a ton on the Shanghai Futures Exchange, while zinc slumped as much as 2.1 percent to 14,855 yuan.

Zinc in London lost 1.8 percent to $1,822 a ton, lead fell 0.7 percent to $1,771.50 a ton, nickel dropped 0.7 percent to $19,060 a ton, and tin was 1 percent down at $17,350 a ton.

http://www.bloomberg.com/news/2010-07-13/copper-declines-in-london-as-china-vows-to-enforce-curbs-on-real-estate.html